Data Input of the Dynamic Simulation Module

After the dynamic simulation module is developed, equations are set up and relevant values have to be input into the module for simulation and analysis. The value input and setting up of the equations are presented in detail in the equation layer, which is shown in Appendix 4. As stocks, which are connected with flows and variables, are the focus of the module, an explanation of their value input is provided below:-

(i) Employee satisfaction: There are three main variables affecting “employee satisfaction”, according to the results of internal interview and survey

conducted by Hunter Douglas Gallery in August 2010. These are employees’ “satisfaction with training”, “satisfaction with working environment”, and “satisfaction with monetary rewards”. These three variables are included in the employee sector. The initial value of “satisfaction with working environment” is six and that of “satisfaction with monetary rewards” is five. The input values of these variables are obtained from the results of the employee survey conducted in 2010. According to the survey results, the average level of employee satisfaction is sixty three, which also serves as the initial value of “employee satisfaction” in the module.

(ii) Training: “Spending on training” and “employee satisfaction built on training for every $1,000 spent” determine the level of employees’ “satisfaction with training”. “Satisfaction with training” is one of the important variables that affects “employee satisfaction”. The initial value of “spending on training” is $2,000 per month and “employee satisfaction built on training for every $1,000 spent” is two. These data are provided by the accounting manager of the Hunter Douglas Gallery.

(iii) Customer satisfaction: From Figure 5.6, “customer satisfaction” is affected by four main factors, namely “satisfaction with order completion efficiency”, “satisfaction with retail service quality”, “satisfaction with advertising” and “satisfaction with product quality”. Changes in value of any of these factors will lead to changes in customer satisfaction. The initial value of customer satisfaction is 50 out of 100. It is assumed that potential customers, who do not have any buying experience at the window fashions retailer, are neither dissatisfied nor satisfied with the company.

“satisfaction with retail service quality”, the results of the customer survey mentioned previously (see Appendix 1 for the questionnaire) are used. As the survey is based on a seven-point Likert scale where seven represent “strongly satisfied” and one “strongly dissatisfied”, it is necessary to convert the survey results into a 0-10 scale in order to be consistent with the module. From the survey results, personal interaction scores 5.27, policy scores 5.06, physical aspects scores 5.02, reliability scores 4.92, and problem solving scores 4.53. These scores are converted into 7.53, 7.23, 7.17, 7.03, and 6.47 respectively. It is assumed that the five variables are of equal importance. Hence, the “satisfaction level of retail service quality” is equivalent to the mean of the total values of these five variables. The initial value of “satisfaction with retail service quality” is assumed to be five.

(v) Satisfaction with product quality: In order to evaluate customers’ “satisfaction with product quality”, again, the results of the customer survey mentioned previously (see Appendix 1 for the questionnaire) are used. The survey is based on the seven-point Likert scale where seven represent “strongly satisfied” one represent “strongly dissatisfied”. In order to be consistent with the module, the survey results of “product features”, “aesthetics”, and “customer-perceived quality” are converted into a 0-10 scale. Hence, their input values in the module are 7.65, 7.98, and 7.75 respectively. The three variables are supposed to be equally important to build customers’ “satisfaction with product quality”. As the blinds provided by Hunter Douglas are famous for being innovative and multi-functional, the initial value of “satisfaction with product quality” is suggested to be six. (vi) Advertising: “Satisfaction with advertising” is determined by “spending on

advertising” and “customer satisfaction built on advertising for every $1,000 spent”. Spending on advertising refers to Hunter Douglas Gallery’s expenditure on marketing and promotions, such as advertising on newspapers or magazines, sending letters or coupons, and distributing brochures, and so on. The data for these two variables are retrieved from the database of Hunter Douglas Gallery and provided by its marketing and accounting managers. The input value of “spending on advertising” is $5,000 per month and that of “customer satisfaction built on advertising for every $1K spent” is 0.62. (vii)Customer loyalty: As discussed before, the RMF approach is adopted in the

module to measure “customer loyalty”. Hence, “recentness” (R), frequency” (F), and monetary” (M) are included. The relationship between RMF and

“customer loyalty” is calculated according to this

equation: ܿݑݏݐ݋݉݁ݎ ݈݋ݕ݈ܽݐݕ = ܨ × ܯ ÷ ܴ. The historical records, archives and operation reports of Hunter Douglas Gallery were studied in order to retrieve the relevant data that are used as the input values of the module. (viii)Potential customers: Potential customers are defined as the ones who are

interested in purchasing the blinds of the window fashions retailer but have not yet made any purchases. The initial value of “potential customer” is estimated by counting the total number of people visiting and passing through Hunter Douglas Gallery. This type of customers will become existing customers once they make purchases. Customer satisfaction often affects the customer acquisition rate.

(ix) Existing customers: This is the customer base of Hunter Douglas Gallery and it is equivalent to the total number of existing customers possessed by Hunter Douglas Gallery. The initial value of the number of existing customers is

2,000, which is concluded from the company’s records and provided by the marketing managers. This type of customers is retained by Hunter Douglas Gallery and they are more loyal to the company when they make repeated purchases. Customer loyalty could encourage existing customers to make repeated purchases.

(x) Order backlog: It refers to the total number of pending or incomplete orders. The initial value of the order backlog is forty, which is mainly concluded from the company’s records as well as operation reports. Once customers make purchases, new customer orders will be created and accumulated at the “order backlog”. “Order completion efficiency” is the key variable to shorten the order lead time, which is the time needed to complete customers’ orders. (xi) Sales volume: Sales volume refers to the total units of products. It is the sum

of initial units and repeated purchase units within the company. The initial value of the sales volume is 8,000, which is concluded from the company records as well as operation reports.